Fact Finders

Working With Business Owners and Their Tax and Legal Advisers

While you will find all sorts of professional alliance programs promoted by many carriers and field organizations, our opinion is that they lack incisive discovery tools that are easy to use and effective at the same time.  To address this gap we developed a Supplement to Business Priority Planning Review to be used in conjunction with one of the forms in the industry-leading Priority Planning Review system from The Virtual Assistant. When combined with the one-on-one support and expertise we will provide, you will have the right combination to work with accounting and legal professionals on insurance-oriented audits of client files – yours and theirs.  This is an approach that is meant to identify opportunities followed by more detailed fact finding and document review.

Are your business owner clients filing this annually?

There are several areas that this one page Supplement form can address.  For example, many business owners are not aware that, based on changes made to the Federal Tax Code in 2006, life insurance death benefits paid to an employer may be subject to income tax. Employer owned life insurance, purchased or materially changed after August 17, 2006, must meet specific exceptions and be in compliance with the IRS “notice and consent” procedure under Section 101(j).

Many successful businesses purchase life insurance on the lives of the business owners and on the lives of other key employees. Common purposes include funding buy-sell agreements, informal financing of nonqualified plans, key person protection and more.

In addition, beginning with tax years ending after November 17, 2007, employers are required to file a report with their tax return regarding life insurance subject to the EOLI “Notice and Consent” requirements, IRS Form 8925. We have found most are not doing this. Non compliance makes the full death benefit subject to income tax. Even term insurance!  

The checklist can uncover Section 101(j) issues and other potential problems such as:

  1. Section 409A compliance for nonqualified plans
  2. Compliance with the 2003 split dollar regulations
  3. Beneficiary designation review and problems like the three-party policy
  4. Buy-Sell Review
  5. Professional Analysis and Review of life insurance policies

Contact Jerry Vanderzanden, CLU, ChFC at jerry@coastalfpg.com for more information.


Non-Qualified Executive Benefit Planning Tools

Typically, one half of an executive compensation plan is comprised of long-term performance based compensation and benefits. This highlights the importance of non-qualified benefit planning for selected executives. There are many design possibilities to help reward and retain a company’s key executives. This Menu of Executive Benefits is useful to see the planning choices. This questionnaire is an ideal tool to use for general purpose, non-qualified plan case design.

For specific non-qualified benefit planning using patented LifeComp business solutions, please use this special questionnaire to assist us in case design.


Life Insurance Underwriting of Foreign Nationals, Residents and Travelers

Few field underwriting challenges are as frustrating as those encountered by producers working with foreign nationals, residents and travelers. We’ve developed a specific Foreign Resident National PreScreen to help you determine the best course of action early in the process. It can help you save time at the triage stage and will improve underwriting results.

To give you an idea of the parameters, here are the guidelines from one of our carriers.

Foreign Travel Guidelines May 2012

Lincoln Foreign National Jan 2012

For foreign nationals without a US nexus in need of a US dollar life insurance policy, there is a solution:

Pan-American Foreign National Program 

Planning overview for non US citizens and residents: 

Using Life Insurance in U.S. Estate Tax Planning for Non-U.S. Citizens & Residents

Planning for Foreign Nationals plus handy flow chart Flowchart for Non US Citizens

Contact Jerry Vanderzanden, CLU, ChFC at jerry@coastalfpg.com for more information.

Popular Form Letters and Fact Finders

We have a variety of commonly requested items available upon request. In addition to using fact finders from a service such as The Virtual Assistant, we use our own form letters e.g. change of agent and inforce illustration requests. We also have client guides and case underwriting tools for advanced sales concepts and for specific underwriting impairments. Don’t “wing it”. Tell us what you need and let our experienced staff assist you.